The fall in contracts from the Highways Agency has led to widespread gloom in the civil engineering sector. And there may be worse to come …
Civil engineers are not a happy bunch at the moment. In fact, that's a bit of an understatement: last week's confidence survey by the Civil Engineering Contractors Association returned the most downbeat results since it was first launched more than seven years ago.

Nearly half of those surveyed said their workload was lighter last month than it was in April 2003. Only 30% said work had increased, and less than a quarter of respondents reported that the situation was unchanged.

Over the next six months to a year, this lack of confidence looks likely to be justified by a gradual downturn in the civils sector.

Jim Turner, the economic adviser to the CECA and author of the latest survey, laid much of the blame at one door: "The biggest drop in work has been with the Highways Agency."

The Highways Agency's business plan suggests that capital expenditure on schemes valued at £5m or more is likely fall in 2004 and 2005.

Much of this fall is caused by a lack of contracts to replace those that are about to come to an end. Work on motorways and trunk roads, for example, is down 35% on last year.

The biggest fall in work is with the Highways Agency

Jim Turner, survey author

John Branton, Birse Civils' business development director, said this had led to more competitive bidding as "jobs aren't hitting the ground as quickly as was hoped".

Things could get worse. Many industry experts are predicting a slowdown in public sector work. Stuart Black, business development director at multidisciplinary consultant Mouchel Parkman, said that his company's work was protected because it was linked to jobs on which the economic cycle had little impact, such as maintenance. He added: "I can understand why those associated with discretionary high-profile projects are worried. They will be the first to be scaled back if, say, the public sector spends less."

Some firms have been protected by their work overseas. This week Balfour Beatty announced that its US civil engineering arm had won contracts in Ohio and Pennsylvania totalling more than £110m.

Hyder Consulting is buoyed by its work in the Middle East. It is looking at the potential of Libya after the political truce between Colonel Gaddafi and Tony Blair.

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